What Is IPO And How To Invest In IPO In India

The Indian stock market presents numerous opportunities for investors and traders to make money. With the right trading or investment strategy, you can create good wealth for yourself. Intraday trading and long term investment are the most common investment activities followed by traders and investors.

These activities are carried out in the secondary market. When it comes to the primary market, you can invest in the stock market through Initial Public Offering (IPO). In this article, you will learn all the details about the IPO.

What is IPO?

When a company decides to go public by raising funds and getting itself listed on the stock exchange, the process is called Initial Public Offering (IPO). The funds collected by the company can be used for expansion, debt payment, diversification into the new business, etc. Before investing in any IPO you must understand all the detail about the offer.

IPO is one of the popular modes of investing money among the long term as well as the short term investors. Some individuals invest for listing gains while others invest to hold it on a long term basis. Therefore, it becomes important to understand how you can invest in IPO in India.

How to Invest in IPO in India?

For applying in an IPO, you must have a demat account. This account can be opened with any stock broker or depository participant (DP). The shares that are allotted in an IPO application get credited in the demat account. The IPO can be applied through brokers or from the registered bank linked to the demat account.

There are two ways through which you can apply for an IPO application; offline and online.

Applying Through Offline Mode

You can apply for IPO manually by visiting the broker and filling the IPO form. Along with the form, you must submit a cheque for the application amount. The broker than ensures that your application is sent for processing.

Applying Through Online Mode

Most of the investors do not know that they can apply for IPO through online mode. You can apply for IPO using Application Supported by Blocked Amount (ASBA) procedure. In this procedure, the application amount gets blocked in your demat account until the finalization of allotment. If no shares are allotted to you, the amount blocked in your demat account would get released. You can apply for IPO through online mode using the broker’s website/application or through the bank account linked to your demat account.

By using the above mechanism you can apply for an IPO application. If you are a newbie or want to open a demat account, you can consider Indira Securities. We are one of the leading brokers in India and ensure that our clients have hassle-free experience of investing in the stock market.

THE AUTHOR: Indira Trade

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